NEW YORK (
were sinking on Wednesday for a fifth consecutive session as the prospect of rising interest rates and the rally in U.S. equities drove investors from the yellow metal.
Gold for June delivery at the COMEX division of the CME was losing $13.20 to $1,411.30 an ounce. The
traded as high as $1,429.40 and as low as $1,404.60 an ounce, while the spot price was dropping $25.60, according to Kitco's gold index.
Gold markets continued to digest a
Wall Street Journal
officials plan to wind down the Fed's open-ended $85 billion a month in purchases of mortgage-backed securities and longer-term Treasuries.
Such a move would suggest the Fed sees improvement in economic conditions, which eventually would lead to rising interest rates. Investors typically view gold as a hedge against inflation, but rising interest rates are anti-inflationary, said George Gero, precious metals strategist at RBC Capital Markets.
Also contributing to gold's decline is the current rally in U.S. stocks. The
has risen 2.18% over the last five sessions, whereas gold has shed 4.23% during the same period. Investors have turned to equities in 2013 as the return on investment has significantly outpaced that of the yellow metal. It's a broader move by investors out of gold and into stocks.
While many observers have noted high physical demand for gold from China, India and global central banks, that physical demand has failed to quell the slow erosion gold prices have seen in the past couple of weeks. Physical demand had pushed prices off 2013 lows reached in mid-April, when COMEX gold experienced its
worst two-day collapse
in some 30 years. Interviews with analysts, brokers and traders reveal that gold is
for technical support.
for July delivery were sliding 85 cents to $22.53 an ounce, while the
U.S. dollar index
was adding 0.32% to $83.87.
Gold mining stocks were mostly lower on Wednesday. Shares of
(GG - Get Report)
were losing 2%, and shares of
(RGLD - Get Report)
were off 1.9%.
Among volume leaders,
(KGC - Get Report)
was little changed at $5.29 a share.
SPDR Gold Trust
was decreasing 0.82%, while
iShares Gold Trust
was down 0.87%.
-- Written by Joe Deaux in New York.